Government, regulators and the media must rethink their approach to philanthropy and encourage more effective charitable giving, a parliamentary group has warned.
A paper from the All-Party Parliamentary Group on Philanthropy and Social Investment says reform of philanthropy would help make charities more nimble.
It says the UK is one of the world’s most generous countries but risks “slipping back” down global rankings without significant change.
The introduction to the research, co-written by Danny Kruger, the Conservative MP for Devizes, and Rushanara Ali, the Labour MP for Bethnal Green and Bow, says philanthropy should aim to transform society.
They say: “Modern philanthropy including social investment, at its best, can work in partnership with both the public sector and private sector to deliver transformational outcomes.
“Charities, working with philanthropists and social investors in close touch with grassroots communities, can operate in an entrepreneurial and nimble fashion that is not always possible for state-funded programmes.
“We need a public policy framework that encourages philanthropy and strengthens charities and social enterprises.”
This includes recommending that government and charity fundraisers work together to help more donors support longer-term, strategic shifts in civil society.
The paper says: “Fundraising in the UK is heavily oriented to campaigns and appeals. This creates a culture of regular low-level giving.
“Supporting donors on their journey from responding to appeals or giving small regular donations toward making bigger gifts or investing in a charity’s social investments requires a different set of fundraising tools, skills and capabilities.
“Until we invest in those capabilities, participation will decline in the wider population and high-income individuals will not be sufficiently well engaged to increase their giving in line with their higher levels of wealth.
“Government could help the fundraising community to build these capabilities by consistently offering support to build capacity through current and future schemes.”
It also calls on finance and charity regulators to co-ordinate more closely on providing philanthropy advice to family offices and other potential donors.
The paper says: “Recently, two family foundations went directly to the High Court to seek clarity on mission-aligned investment because guidance from the Charity Commission and Financial Conduct Authority has been ambiguous on the prioritisation of financial returns over social impact.
“Government could engage both the Charity Commission and FCA to develop targeted guidance in key areas.”
A civil servant could act as a champion of philanthropy and social investment inside the government to pursue some of these aims, the paper suggests – an idea also championed this summer by the Law Family Commission for Civil Society.
The paper also criticises the media’s approach to philanthropy, and argues that corporate gifts in particular “are often treated with suspicion” by journalists.
“The ambivalent public discourse on philanthropy means many philanthropists opt to operate under the radar, thus reducing transparency and accountability, and thereby perpetuating negative stereotypes,” the MPs say.